Poll: Is Subbarao the 'worst performing' RBI Governor?

Poll: Is Subbarao the 'worst performing' RBI Governor?

D Subbarao, who completes his five-year term as RBI governor on September 5, was recently criticised by Arvind Panagariya, professor at Columbia University and a noted economist, on the ground that the central bank did not build foreign exchange reserves when the rupee was appreciating in 2009-10.

Business Standard takes a look at the performance of RBI governors since 1990.

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Image: Members of the media gather outside the head office of the Reserve Bank of India.Photographs: Punit Paranjpe/Reuters

Poll: Is Subbarao the 'worst performing' RBI Governor?

Foreign exchange reserve (as % of GDP): Increased from 3.89 per cent to 7.29 per cent

GDP growth: Saw a massive rise from 1.43 per cent to 7.97 per cent

Annual inflation (WPI): Moved down from 13.7 per cent to 4.6 per cent

Currently, the chairman of the Prime Minister’s Economic Advisory Council, Dr. C Rangarajan was a professional economist.

Prior to his appointment as the Governor, he held charge as RBI's Deputy Governor for over a decade.

He was also a member of the Planning Commission and a member of the Tenth Finance Commission.

His tenure as Governor saw unprecedented central bank activism to put in place a comprehensive set of measures to strengthen and improve the financial sector. New institutions and instruments were introduced for this purpose. He is also credited with establishing a unified exchange rate.

In the field of monetary policy, his tenure saw the historic memorandum signed between the Bank and the Government whereby a cap was put on the automatic finance by the Bank to the Government in the form of ad hoc treasury bills.

Poll: Is Subbarao the 'worst performing' RBI Governor?

Foreign exchange reserve (as % of GDP): Rose further from 7.29 per cent to 15.46 per cent

GDP growth: Slowed from 7.97 per cent to 3.99 per cent

Annual inflation (WPI): Moved down from 4.6 per cent to 3.4 per cent

He is one of the longest serving RBI chiefs. Prior to becoming the Governor, he had served as the Chief Economic Advisor to the Government of India, Banking Secretary, Finance Secretary, Member Secretary of Planning Commission, and Chairman of the Economic Advisory Council to the Prime Minister.

He had also represented India on the Executive Boards of the IMF and the World Bank.

During his tenure, India weathered the Asian Crisis and emerged stronger than before. He effectively implemented the liberalisation process started by his predecessor.

Poll: Is Subbarao the 'worst performing' RBI Governor?

Foreign exchange reserve (as % of GDP): Increased from 15.46 per cent to 27.02 per cent

GDP growth: Went up to 9.32 per cent from 3.99 per cent

Annual inflation (WPI): Moved up from 3.4 per cent to 4.7 per cent

Yaga Venugopal Reddy, the twenty-first Governor, was a member of the Indian Administrative Service. He has spent most of his career in the areas of finance and planning.

Reddy has made significant policy contributions in the areas of financial sector reforms; trade finance; monitoring of balance of payments and exchange rate; external commercial borrowings; centre-state financial relations; regional planning; and public enterprise reform and has been closely associated with institution building.

He has also served as Secretary (Banking) in Ministry of Finance, Additional Secretary, Ministry of Commerce, Joint Secretary in Ministry of Finance in Government of India, Principal Secretary, Government of Andhra Pradesh and had a six year tenure as Deputy Governor of the Reserve Bank of India.

Prior to his appointment as the Governor, Dr. Reddy was India's Executive Director on the Board of the International Monetary Fund.

He was the Finance Secretary prior to becoming the 22nd Governor, and he is due to retire on Sep 4, 2013.

The year he took the reigns, Global Financial Crisis - one of the worst financial crisis since the Great Depression of 1930s - occured

Since the beginning of his tenure, the economy has been in the state of crisis due to global events. India’s growth started slowing down after a fantastic run during his predecessor’s service. Inflation rose consistently and so did the interest rates. Indian currencies touched an all-time low against dollar.

Analysts and economist criticise him for not taking enough measures to control the falling rupee but rather concentrating on the growth.

He is also said to have a mind of his own and is known to override opinion of his fellow members in the Technical Advisory Group on Monetary Policy.

Despite all this, Subbarao is credited with demystifying the working of RBI. He made efforts to present the complicated macro economic concept in a lucid manner in RBI publications. He took commendable steps in financial inclusion and financial literacy.

Subbarao has earlier been Secretary to the Prime Minister's Economic Advisory Council (2005-2007), lead economist in the World Bank (1999-2004), Finance Secretary to the Government of Andhra Pradesh (1993-98) and Joint Secretary in the Department of Economic Affairs, Ministry of Finance, Government of India (1988-1993).